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International Journal of Applied Research
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ISSN Print: 2394-7500, ISSN Online: 2394-5869, CODEN: IJARPF

g-index: 90

Vol. 10, Issue 10, Part B (2024)

Growth of micro financial institutes in Chhattisgarh state

Growth of micro financial institutes in Chhattisgarh state

Author(s)
Rashmit Kaur and Dr. Aashima Masih
Abstract
Microfinance is like giving a financial lifeline to the underserved. Imagine a small village where traditional banks are out of reach, and people struggle to get loans for basic needs or entrepreneurial ventures. Here’s where microfinance steps in, offering small loans, savings accounts, and other financial services to those who don’t have access to the typical banking system.
Picture an artisan named Rani. She crafts beautiful handmade jewelry but lacks the funds to buy enough materials to expand her business. Microfinance institutions (MFIs) like Grameen Bank step in to help her. They provide a small loan; say $100, without the need for traditional collateral. This loan allows Rani to purchase more materials, increase her production, and eventually grow her business. She can now support her family better and even create jobs in her community.
Microfinance isn’t just about loans, though. It also includes savings, insurance, and training services. Take Mohammed, a farmer who used microfinance services to save money for better seeds and tools. With the training offered by the MFI, he learned modern farming techniques, improving his yield and income.
The impact goes beyond individual stories. Microfinance empowers entire communities, fostering economic independence and breaking the cycle of poverty. Women, in particular, benefit immensely, gaining financial independence and social status. It’s a ripple effect—helping one person can lead to broader community development and stability.
The success of microfinance hinges on the concept of social collateral. Instead of requiring physical assets, MFIs rely on trust and peer support. Borrowers often form groups, where they guarantee each other’s loans. This system creates accountability and ensures high repayment rates. If Rani and her fellow artisans form a lending group, they support each other in paying back their loans, fostering a sense of community and mutual responsibility.
Critics argue that microfinance isn’t a cure-all. High interest rates, potential for over-indebtedness, and sometimes limited impact on poverty alleviation are cited concerns. But when done right, with a focus on fair terms and support services, microfinance can be transformative.
In essence, microfinance is about inclusion. It’s about giving the underserved a chance to improve their lives through financial services that are tailored to their needs. It’s not just money; its hope, dignity, and the power to change their future.
Pages: 119-121  |  20 Views  12 Downloads


International Journal of Applied Research
How to cite this article:
Rashmit Kaur, Dr. Aashima Masih. Growth of micro financial institutes in Chhattisgarh state. Int J Appl Res 2024;10(10):119-121.
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